Bill would divert gas-tax-hike money to interstate widening projects

A proposal by a longtime S.C. senator would siphon millions from a main source of gas-tax-hike revenues that lawmakers promised would go toward fixing the state’s crumbling roads and bridges, and instead earmark that money for widening interstates.

It also could be a way around what the state transportation chief previously has described as a funding problem for interstate projects because of pending court challenges.

Under a bill prefiled last week by Sen. Nikki Setzler, D-Lexington, some of the vehicle sales-tax revenues currently dedicated to the “Infrastructure Maintenance Trust Fund” (IMTF), which was created with the gas-tax-hike law, would be diverted to a new “Interstate Lane Expansion Fund.”

The bill gives the State Transportation Infrastructure Bank (STIB), which over the years has funneled several billion dollars to large construction projects in select counties, to choose the interstate projects, though the new fund “may not be used for projects approved by the bank before July 1, 2019,” or “to construct new interstates.”

The proposal will go to the Senate Finance Committee, of which Setzler is a member. Setzler, the Senate minority leader and who was first elected in 1976, did not return a phone message Wednesday from The Nerve seeking comment.

Lawmakers will take up the legislation after they return next month to Columbia. They also will consider a separate bill prefiled last week by Sen. Greg Hembree, R-Horry and a member of Senate Finance, which would allow voters in counties – presumably focusing on coastal counties – to decide whether to approve a 1-cent-per-gallon tax on gasoline to pay for “beach renourishment” projects.

Setzler’s bill would lower the percentage of the old vehicle sales-tax cap of $300 dedicated to the IMTF and direct the difference for interstate widening projects approved by the STIB. The gas-tax-hike law, which took effect July 1, 2017, raised the gas tax by 12 cents per gallon over six years, and also increased other vehicle taxes and fees, including raising the vehicle sales-tax cap by $200.

A review by The Nerve of IMTF revenues collected through Nov. 30 found that based on Setzler’s bill, at least $34 million would have been diverted to the proposed interstate-widening fund, which the STIB could use to finance hundreds of millions in bonds. More than $207 million has been collected since July 1, 2017, under the section of the law that Setzler’s bill would amend, records show.

The South Carolina Policy Council, the parent organization of The Nerve, has contended that the gas-tax-hike law was written in way to allow DOT to divert IMTF revenues to pay bond debts of the STIB.

In passing the gas-tax-hike law, lawmakers promised that the money would be used toward fixing the state’s pothole-riddled roads and deteriorating bridges in their constituents’ communities. The state Department of Transportation has said 80 percent of the state’s 42,000 miles of roads needs to be resurfaced or rebuilt, and identified 465 of 750 “structurally deficient” bridges to be replaced.

But DOT chief Christy Hall in June told The Nerve that the STIB could use IMTF revenues for earlier-approved interstate-widening projects. In April, she told DOT commissioners that pending lawsuits challenging the constitutionality of the gas-tax-hike law and a related 2016 statute have forced the agency to seek other funding sources for interstate projects.

The DOT Commission in October approved a new rural interstate-widening program that agency records show would be funded in part with revenues that would be freed up by 2024 after a gas tax credit expires. The Nerve revealed, however, that DOT might have to transfer at least $300 million to cover expected shortfalls in a state account that will be used to fund the credits until they expire.

As of Nov. 30, nearly $384 million in collected revenues under the gas-tax-hike law had not been spent, according to DOT figures released this week. Of the approximately $472.5 million in total revenues collected since July 1, 2017, $54 million, or less than 12 percent, was spent on “external” projects identified by DOT.

Of the $872.5 million in IMTF “project commitments” identified by DOT as of Nov. 30, nearly $246 million, or 28 percent, of the total was designated for “interstate upgrades.”

Following is a breakdown of the total amounts spent on “external” projects in counties as of Nov. 30 under the gas-tax-hike law, according to online DOT records, though specifics on the actual work done were not provided. In several cases, DOT combined counties while listing other projects in those counties; another $252,216 was spent in DOT Districts 2 and 3, though counties in those districts weren’t identified.

Abbeville: $121,360

Aiken: $2,237,697

Allendale: $4,291

Anderson: $1,814,257

Anderson, Oconee: $57,440

Bamberg: $6,863

Barnwell: $6,081

Berkeley: $4,874,907

Charleston: $1,061,833

Cherokee: $516,841

Chester: $247,483

Chesterfield: $2,139,147

Chesterfield, Lancaster: $67,882

Colleton: $175,894

Darlington: $2,073,765

Dillon: $2,932,006

Dorchester: $1,316,680

Edgefield: $269,479

Fairfield: $137,730

Florence: $692,765

Georgetown: $51,067

Greenville: $5,901,033

Greenwood: $332,790

Hampton: $3,685

Horry: $130,132

Jasper: $4,377,888

Kershaw: $211,800

Kershaw, Sumter: $37,362

Lancaster: $350,772

Laurens: $48,574

Lee: $604,907

Lexington: $1,403,917

Marion: $2,917,608

Marlboro: $798,477

McCormick: $101,692

Newberry: $493,972

Oconee: $2,626,476

Orangeburg: $1,645,529

Pickens: $2,034,066

Richland: $1,560,200

Saluda: $1,705,157

Spartanburg: $47,378

Sumter: $1,728,478

Union: $630,577

Williamsburg: $460,055

York: $2,754,765

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerv

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